The sentiments were driven by an overall positive atmosphere owing to IMF’s review under the SBA, after the completion of technical talks, followed by policy level discussions scheduled to begin on Monday.
Overall, discussions seem to be on a positive trajectory with IMF mostly questioning the fiscal targets and delay regarding gas price revisions. On the macro front, expectations of a reduction in CAD during FY24 to US$4.5 billion, alongside healthy agri output to boost exports are the positive triggers.
Further, crude oil prices continue to slide amidst uncertainty over China’s economic recovery and stability in US reserves, Arab light/ WTI/ Brent being traded at US$84.7/ US$76.7/ US$81.1 per barrel.
On the currency front, US$/PKR slid for the second straight week, ending at 287.03, down 0.95%WoW amidst rising import demand, alongside concerns regarding IMF talks.
Furthermore, PIB auction held during the week saw yields declining, with 3/ 5/ 10 year bond yields slipping to 17.39%/ 15.95%/ 15.10% (down 180/ 100/ 15bps), reinforcing expectations of an end to further monetary tightening.
Other news for the week were: 1) SIFC assessed Sinopec’s interest; 2) US$3 billion projects approved for flood-hit areas; 3) IMF talks uncovered major gaps; 4) Cotton production jumps by 83%; 5) Reko Diq deal with Saudi firm to be signed this year; 6) Nepra allowed Discos PKR0.4/unit tariff hike under FCA for September 23.
Top performing sectors included Chemical and Cement, while Close-end Mutual Fund saw major selling. Flow-wise, major selling was recorded by Insurance with a net sell of US$16.9 million, while Banks/DFI absorbed the selling with a net buy of US$16.3 million.
Top performing scrips were: CNERGY, KOHC, CEPB, FCCL, and KTML, while laggards included HGFA, UNITY, BNWM, EFUG, and ABOT.
Top volume leaders were: CNERGY, PRL, HUMNL, KOSM, and WTL.
Going forward, analysts maintain an optimistic outlook of the market and believe the present rally to continue, albeit with episodes of profit taking. This stance stems from an expected positive conclusion of the IMF’s review amidst improving macro indicators and fading uncertainty over the upcoming elections, even though the country faces tough economic decisions in the near future.
Overall, brokerage houses advise their clients to focus on fundamentals, with exposure in high dividend yielding scrips.
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